Some  Grounds  For 
Encouragement  In 
The  Railway  Situation 


An  Address  Before 

The  Transportation  Club  of  Indianapolis 
March  31,  1911 


i 


By 

FAIRFAX  HARRISON 

President  Chicago,  Indianapolis  & Louisville  Railway  Co. 


Digitized  by  the  Internet  Archive 
in  2015 


https://archive.org/details/somegroundsforenOOharr 


1932 


SOME  GROUNDS  FOR  ENCOURAGEMENT  IN  THE  RAIL- 
WAY SITUATION. 

It  is  with  some  hesitation  that  I venture  to  avow  that  there  are 
cheerful  views  on  the  railroad  situation  today,  because  there  are  so 
many  difficulties  surrounding  the  management  of  railroad  property 
as  almost  to  justify  a railroad  officer  in  becoming  a confirmed 
pessimist.  But  leaving  for  the  moment  to  others  the  rehearsal  of 
the  difficulties,  it  may  be  well  to  look  for  portents  of  good  omen. 
Fortunately,  the  railway  horizon  is  not  altogether  black.  Even  in  the 
decision  of  the  great  rate  case,  which  brought  bitter  disappointment 
to  many  railway  managers  who,  with  confidence,  had  expected  from 
it  some  measure  of  relief  from  their  immediate  responsibility — even 
in  that  disappointment  there  are  grounds  for  encouragement. 

In  one  vital  respect  that  great  controversy  has  accomplished 
something  for  the  railways  which  has  never  before  been  possible.  The 
very  importance  of  the  questions  involved  and  the  theory  on  which 
the  case  was  presented  required  the  Interstate  Commerce  Commission 
to  make  a thorough  examination  of  the  financial  condition  of  all  the 
railways  of  the  United  States.  The  result  was  impressive.  With 
opportunity  such  as  no  one  ever  has  had  before,  not  even  the  great 
banking  houses,  and  after  months  of  careful  and  serious  investigation, 
the  accredited  experts  of  the  government  in  railway  matters — the  In- 
terstate Commerce  Commission — came  to  the  conclusion  and  certified 
to  the  world  that  under  existing  conditions  the  American  railways  are 
financially  sound.  Think  what  this  means  to  the  doubtful  investor. 
No  industry  seeking-  capital,  with  the  single  exception  of  the  national 
banks,  has  ever  had  such  a certificate.  One  could  now  almost  endorse 
on  a new  issue  of  bonds  “Security  approved  by  the  United  States.” 
Furthermore,  because  responsible  and  harried  officers  of  the  railways, 
doubtful  of  the  solution  of  their  immediate  and  pressing  problem 
of  prolonging  successful  management,  had  testified  that  the  railways 
should  have  additional  revenue  if  they  are  to  grow  and  prosper,  the 
Interstate  Commerce  Commission  added  the  assurance  that,  if  the 
time  shall  come  when  such  a view  shall  be  demonstrated  to  be  imme- 
diately apparent,  they  (the  Commission)  will  exercise  the  power 
which  the  law  vests  in  them  and  permit  such  advances  of  rates  as 
may  be  necessary  to  maintain  the  sound  financial  condition  which 
they  certify  now  exists.  Let  us  consider  for  a moment  what  is  the 
import  of  this  declaration  and  solemn  covenant.  Every  successful 
railroad  in  the  country  must  continue  to  grow.  A railroad  which  is 


1 


not  a progressive  railroad  is  a dead  railroad.  The  American  people 
have  been  wont  to  look  to  the  railways  to  lead  in  promoting  and 
encouraging  new  industry,  for  there  is  no  industry  in  which  they  are 
not  partners.  As  the  volume  of  the  business  grows  the  railways; 
must  expand  and  in  our  Jack’s  bean  stalk  civilization  such  expansion 
will  always  be  too  rapid  to  admit  of  providing  the  necessary  money 
out  of  the  accumulated  railway  income,  be  it  never  so  conservatively 
administered.  The  railways  must,  therefore,  be  forever  calling  for 
new  capital,  and  that  they  can  now  do  and  point  to  a definite  assur- 
ance that  the  national  government  will  foster  and  protect  the  capital 
so  invested.  It  was  almost  worth  the  disappointment  over  the  ad- 
verse decision  in  the  rate  case  to  realize  this. 

Gentlemen,  the  railways  of  the  United  States  are  not  ruined  by 
the  rate  decision,  but  it  has  in  truth  called  on  them  for  a tremendous 
new  effort. 

The  most  important  ground  for  encouragement  today  is  the 
fresh  stimulus  which  has  been  given  to  the  study  and  practice  of 
efficiency  in  railroad  operation,  for  we  still  hope  to  overcome  our  dif- 
ficulties by  self  help  rather  than  through  enfeebling  dependence  upon 
a government  guaranty. 

I do.  not  now  refer  to  or  advocate  the  theory  or  the  application 
to  the  railways  of  the  so-called  “scientific  management”  which  has 
lately  been  bruited  over  the  land.  Whatever  may  be  accomplished 
by  such  means  in  individual  industrial  functions,  we  may  safely 
assume  that  “scientific  management,”  as  the  term  is  currently  used, 
will  never  be  practiced  in  the  broad  and  complicated  problem  of  rail- 
road operation.  The  representatives  of  organized  labor  at  the  recent 
hearings  before  the  Interstate  Commerce  Commission  spoke  the  final 
word  of  impossibility  to  any  such  expectation  when  they  said  that 
American  labor  would  never  submit  to  the  mechanical  limitations 
of  those  methods. 

Nevertheless,  there  is  an  increased  efficiency  of  method  which 
can  be  practiced  and  which  will  go  far  to  accomplish  the  salvation  of 
the  American  railways  which  are  today  operating  on  a narrow,  and 
hitherto  ever  narrowing,  margin  between  the  lowest  rates  in  the 
world  and  the  highest  wages  in  the  world. 

It  may  be  admitted  that  many  of  the  methods  of  current  railway 
operation  are  wasteful,  but  the  railways  do.  not  stand  alone  convicted 
of  this  serious  indictment.  As  a people  we  are  the  most  wasteful 
civilization  has  ever  seen.  It  is  an  evidence  of  our  youth.  We  use  our 
. natural  resources  as  a child  plays  with  his  Christmas  toys,  with  hectic 
attention  now  to  this,  now  to  that,  and  so  little  care  or  forethought 


2 


that  at  the  end  of  Christmas  day  many  of  the  gew-gaws  are  broken 
and  destroyed.  It  has  been  so  with  our  forests.  The  state  of  Indiana, 
once  almost  entirely  forest,  stands,  scarcely  a century  since  the  first 
considerable  immigration,  practically  denuded  of  native  lumber  sup- 
ply, so  that  her  railways  are  buying  their  crossties  in  Northern  Michi- 
gan and  in  Mississippi.  We  still  see  rotting  fences  of  walnut  rails  to 
testify  to  the  exuberance  of  the  original  timber  and  the  waste  of  the 
pioneers.  This  beautiful  city  of  Indianapolis  would  today  be  still 
more  beautiful  if  only  one  in  a hundred  of  the  great  trees  were  still 
standing  which  once  made  a canopy  over  its  site.  It  will  be  recalled 
that  the  city  was  laid  out  in  1821  in  a dense  forest.  Says  Mrs.  Lever- 
ing in  her  delightful  “Historic  Indiana”: 

“After  Indianapolis  actually  became  the  seat  of  government,  the 
authorities,  being  anxious  to  have  the  streets  opened  up,  gave  the 
magnificent  timber,  in  what  is  now  Washington  street,  to  the  con- 
tractor for  removing  it.  After  the  trees  were  felled  there  were  no 
mills  to  cut  them  up  and  no  demand  for  lumber,  so  the  logs  were 
rolled  up  in  piles  and  burned,  to  the  loss  of  the  contractor  and  the 
regret  of  later  generations.  Great  sugar  groves  occupied  the  ground 
where  the  Soldiers’  Monument  now  stands  and  where  the  State  House 
is  situated.” 

What  has  become  of  the  reservoir  of  natural  gas  which  so  short 
a time  ago  was  one  of  the  glories  of  Indiana?  It  would  be  merely 
painful  to  ask  if  it  has  been  efficiently  conserved  and  distributed. 

Waste  is  the  characteristic,  also,  of  our  agriculture.  Rejoicing- 
in  a soil  than  which  there  is  no  richer  in  the  world — the  deep,  black 
humus  filled  area  of  the  corn  belt — many  Indiana  farmers  go  on  rob- 
bing the  land  of  its  fertility  with  crop  after  crop,  and  little  thought  for 
the  future.  They  have  always  believed  that  if  the  incredible  should 
become  the  actual  and  their  land  should  no  longer  yield,  they  could 
pull  up  and  go  West,  as  their  fathers  'came  to  Indiana,  to  a promised 
land  where  virgin  soil  forever  awaits  the  plough.  Even  today,  when 
the  Census  tells  us  how  many  farmers  have  so  emigrated,  and  there 
appear  to  be  limits  even  to  the  hospitality  of  the  West,  we  see  too 
few  Indiana  farmers  conserving  what  they  have  by  keeping  cattle 
and  feeding  on  their  land  at  least  a part  of  the  abundant  corn  crop  ; 
i ' and  at  this  season  of  the  year  we  even  see  the  farmer  burning  in  the 
field  the  fodder  which  might  have  carried  some  young  cattle  over 
the  winter. 

We  are  wasteful,  too,  in  our  personal  habits  of  extravagance. 
Senator  McCumber  of  North  Dakota  put  this  very  well  and  forcibly 
in  Congress  the  other  day  when  he  rehearsed  what  the  farmer,  so 


frugal  at  home,  spends  for  a day  in  New  York.  Here  is  his  list  of 
expenses  measured  by  farm  produce : 

Cab  to  hotel. 6 bushels  of  oats. 

Tip  to  driver 15  cabbages. 

Tip  to  elevator  boy 2 dozen  eggs. 

Tip  to  bell  boy \y%  bushels  of  barley. 

Breakfast .' R2  ton  of  hay. 

Tip  to  waiter.. 2 bushels  potatoes. 

Luncheon 1 sheep. 

Tip  to  waiter iy2  bushels  of  carrots. 

Dinner  4 bushels  of  rye. 

Tip  to  waiter 1 bushel  of  onions. 

Room  Half  a car  of  turnips. 

So  in  confessing  that  American  railway  practice  has  been  wasteful 
the  railway  man  simply  takes  his  place  beside  his  fellow  citizens  in 
other  walks  of  life,  but  there  is  an  economic  pressure  on  him  which 
no  other  class  of-the  community  has  yet  felt,  and  this  has  been  teach- 
ing us  since  the  panic  of  1907  that  we  must  learn  to  practice  efficient 
economy  in  railway  operation.  Mr.  Brandeis  has  undoubtedly 
quickened  this  study  by  quoting  so  publicly  and  so  dramatically  as 
to  arrest  the  attention  of  the  nation,  the  extravagant  claim  of  one  of 
the  efficiency  engineers  that  the  railways  might  save  a million  dollars 
a day  by  adopting  his  particular  panacea.  While  little  serious  con- 
sideration has  been  given  to  this  claim,  it  is  a fact  that  since  Mr. 
Brandeis  sounded  his  clarion,  many  responsible  railway  managers, 
who  had  some  difficulty  in  restraining  their  immediate  indignation 
at  the  impertinence  of  the  assertion,  have  been  looking  about  with 
renewed  energy  to  see  where  they  can  institute  greater  efficiency  of 
operation.  Men  who  have  reached  the  top  because  they  have  been 
more  efficient  than  their  fellows  are  now  taking  up  their  belts  another 
hole  and  asking  questions  which  have  set  many  a subordinate  forward 
to  a realization  that  he  is  spending  money  unnecessarily  to  accom- 
plish his  particular  stint  of  work. 

If  the  operating  offices  are  studying  more  closely  their  unit  costs 
today,  it  may  not  be  considered  inopportune  to  question  whether  the 
traffic  officers  may  not  with  profit  study  the  efficiency  of  their  methods 
also.  One  can  fairly  ask  whether  rate  making  as  practiced  today  is 
as  efficient  or  as  systematic  as  it  might  be.  It  has  been  well  said,  in 
explanation  of  the  apparent  lack  of  system,  that  railroad  rate  making 
is  not  a science,  but,  like  any  other  price  making,  is  an  art.  But  this 
statement  will  not  justify  beyond  criticism  our  present  methods  of 


making  rates.  Artists  are  notoriously  given  to  vagaries,  and,  yielding 
to  no  one  in  admiration  for  what  is  perhaps  the  best  equipped  set  of 
men  in  the  railway  service — the  traffic  managers— it  must  be  admitted 
that  there  has  not  been  much  technique  in  their  practice  of  the  art  of 
rate  making  in  the  past.  They  have  seldom  based  their  rates  on  prin- 
ciple; they  have  sought  chiefly  to  secure  tonnage  and  move  it,  and 
they  have,  out  of  very  human  necessity  and  temptation,  made  many 
compromises  under  the  exigencies  of  competition,  which  have  resulted 
in  the  present  low  basis  of  rates.  Every  shipper  knows  that  he  has 
secured  the  reduction  of  more  rates  from  the  traffic  manager  than 
from  the  railroad  commissioner.  It  is  doubtful  whether  any  current 
rate  between  competitive  points  can  be  analyzed  to  principles ; usually 
it  is  the  result  of  transportation  and  commercial  history,  and  as  little 
represents  the  “value  of  the  service”  as  it  does  the  theory  of  “what 
the  traffic  will  bear.” 

But  hereafter  under  government  regulation  the  rate  maker  must 
base  his  work  upon  principle,  and  while  probably  he  can  never,  under 
our  American  conditions,  create  a strict  science  of  rate  making,  he 
can  promote  the  art  into  a profession.  A profession  is  the  practice 
of  individual  initiative  under  established  rules ; the  lawyer  shapes 
and  weaves  the  settled  rules  of  the  law  to  meet  new  facts  and  condi- 
tions under  the  regulation  of  the  courts.  The  surgeon  adjusts  his 
every  operation  to  the  sudden  emergen cy,  but  always  within  the 
limitation  of  the  binding  etiquette  of  his  profession.  Both  lawyer  and 
doctor  draw  on  science,  the  recorded  theory  of  the  philosopher,  and 
both  use  art  in  the  particular  application,  but  always  they  can  cite  a 
principle  for  everything  they  do;  and  it  is  in  this  that  a Profession 
differs  from  an  Art.  The  great  painter  is  little  bound  by  rules  and 
philosophy;  the  musician  even  less;  their  individual  genius  flowers 
differently  in  every  generation.  The  nightingale  cannot  tell  why  he 
gushes  melody. 

It  is  possible  that  the  ratemaker  in  the  past  has  modeled 
himself  more  on  the  nightingale  than  on  the  lawyer  and  the  doctor, 
but  it  is  a cheering  promise  for  the  future  of  American  railway  prac- 
tice that  the  necessity  of  constantly  justifying  his  rates  upon  the 
witness  stand  is  forcing  the  traffic  officer  to  study,  for  example,  the 
cost  of  service  as  an  element  of  the  basis  for  a rate. 

It  is  fair  to  say  that  the  traffic  officer  has  had  peculiar  handicaps 
not  of  his  own  making.  One  of  the  greatest  difficulties  he  has  met  in 
adjusting  himself  to  regulation  has  been  the  unfortunate  ease  with 
which  the  lawyers  have  defended  what  is  sometimes  bungling  rate 
making  by  the  terrible  plea  of  confiscation.  When,  in  the  case  of 


5 


Smyth  v.  Ames,  the  Supreme  Court  of  the  United  States  laid  down 
the  principle  that  there  is  a minimum  below  which  regulation  may 
not  reduce  railroad  revenue,  and  restrained,  on  the  ground  that  they 
were  confiscatory,  the  maximum  rates  which  the  state  of  Nebraska 
had  sought  to  impose  on  the  railways,  a swarm  of  injunctions  was 
let  loose,  like  locusts  upon  the  land.  Every  time  governmental  author- 
ity regulated  a rate  or  a system  of  rates,  the  railway  officers,  under 
the  advice  of  counsel,  pulled  long  faces  and  pleaded  poverty.  While 
in  some  cases  of  a general  attack  upon  a whole  system  of  rates  it  was 
a sound  plea  and  well  taken,  in  other  cases,  involving  a single  rate 
alone,  it  was  Pickwickian. 

As  a result  of  the  analysis  by  the  Interstate  Commerce  Com- 
mission of  the  financial  condition  of  the  railways  as  a whole,  confisca- 
tion, as  a working  hypothesis  in  practical  rate  making,  is  likely  to  be 
relegated  to  the  limbo  of  history,  to  be  there  reserved  for  invocation 
in  those  rare  cases  where  sudden  popular  fury  seeks  to  overthrow  all 
constitutional  limitation  and  the  very  bulwark  of  property. 

The  study  of  systematic  rate  making  has  been  confused  also  by 
the  will-o’-the-wisp  of  the  Physical  Valuation  theory.  At  first  it  was 
the  popular  advocate,  the  shrewd  politician,  who  seized  upon  Physical 
Valuation  as  a slogan  because  he  had  heard  so  much  of  watered 
securities  that  he  believed  that  a valuation  of  railway  property  would 
afford  an  automatic  excuse  for  compelling  a reduction  of  rates.  But 
after  the  first  few  valuations  had  been  made  the  shrewd  politician 
dropped  that  theory  like  a hot  potato.  The  practice  of  the  railways 
in  the  past  of  putting  back  into  the  property  so  large  a proportion  of 
their  revenues  through  maintenance  expenses,  and  the  increment  of 
real  estate  values  which  the  railways  claimed  equally  with  the  owner 
of  the  corner  lot,  were  demonstrated  to  have  run  up  the  physical 
value  of  most  of  the  railways,  when  ascertained  by  any  fair  system 
of  appraisal,  to  a figure  which  was  dangerous  to  the  theory  that  rates 
were  too  high  if  based  solely  on  physical  value.  So  some  railways 
themselves  who  at  first  had  opposed  physical  valuation,  seized  upon 
the  discard  of  the  politician  and  promoted  it  into  a ground  for  an 
injunction.  But  probably  this  plea  must  now  be  abandoned  also  by 
the  railways.  The  implacable  logic  of  the  suggestion  that  on  this 
theory  as  values  are  constantly  increasing,  rates  must  also  constantly 
increase,  would  seem  to  put  an  end  to  rate  making  on  the  simple 
arithmetic  of  Physical  Valuation,  for  every  student  of  political 
economy  knows  that  railway  rates  in  the  United  States,  taken  by  and 
large,  have,  through  the  operation  of  general  economic  laws,  gradu- 
ally and  steadily  decreased. 


6 


I believe  that  most  traffic  officers  will  be  glad  to  be  put  to  the 
necessity  of  justifying  their  rates  by  the  more  difficult  appeal  to  the 
merits  of  their  handiwork,  and  so  to  become  practitioners  of  what 
will  be  recognized  as  a learned  profession. 

It  is  a cheerful  sign  of  the  times  also  to  observe  new  evidences 
of  increasing  efficiency  in  the  practice  of  the  government  function 
of  Regulation.  A jury  empanelled  from  the  general  body  of  citizens 
is  doubtless  as  well  qualified  to  judge  the  merits  of  facts  in  contro- 
versy as  any  human  agency;  they  represent  what  the  poet  terms 
the  Common  Sense  of  Most.  But  when  it  comes  to  passing 
upon  the  merits  of  the  technical  activities  of  highly  organized  and 
sensitive  functions  like  those  involved  in  the  operation  of  a railway, 
it  is  not  too  much  to  ask  that  at  least  a special  panel  should  be  drawn 
for  the  jury  in  such  cases.  Whatever  may  have  been  the  case  in  the 
past,  when  Regulation  was  in  its  infancy,  today  the  government 
officers  who  administer  the  powers  of  regulation  which  the  state  has 
assumed  to  exercise,  are  becoming  daily  better  qualified  and  more 
expert  in  their  duties,  and  as  they  appreciate  the  problems  of  the  rail- 
way officer  and  learn  from  personal  contact  that,  like  themselves,  he 
is  usually  a very  human  man  trying  to  do  his  duty  to  those  who 
employ  him,  and  very  little  of  an  octopus,  they  have  grown  tolerant 
and,  while  alert  to  perform  the  full  measure  of  their  public  duty,  are 
increasingly  willing  to  be  fair,  even  when  there  are  strong  evidences 
of  momentary  popularity  to  be  derived  from  doing  the  thing  which 
is  unfair. 

While  discussing  regulation,  I venture  to  suggest  to  some  of  you 
who  are  engaged  in  other  industry  than  railroading,  that  regulation 
is  not  likely  to  be  forever  limited  to  railroads.  The  railroads  have 
perhaps  been  through  the  worst  of  their  experience,  and  are  now 
almost  ready  to  take  their  place  in  the  safe  and  strictly  supervised 
rank  of  the  national  banks.  In  the  next  few  years  they  will  probably 
be  able  to  view  with  sympathy  the  similar  subjugation  of  other 
branches  of  industry.  The  recent  decision  of  the  Supreme  Court 
upholding  the  corporation  income  tax  law  has  firmly  driven  in  the 
entering  wedge  of  effective  and  implacable  governmental  control  of 
all  corporate  forms  of  activity. 

The  system  of  the  social  democratic  state  which  regulation  of 
industry  involves  may  thus  be  enabled  to  fasten  upon  all  our  com- 
mercial life.  It  will  perhaps  next  manifest  itself  in  respect  of  our 
manufacturers,  and  it  will  not  be  confined  to  the  trusts.  The  small 
railroad  has  been  included  with  the  great  system  and  is  regulated 
equally  with  them;  so  the  logic  of  regulation  will  involve  the  small 


7 


manufacturer  with  the  great.  Perhaps  not  even  the  press  will 
escape  regulation.  Ferdinand  Lasalle,  who  in  the  middle  of  the 
nineteenth  century  was  preaching  in  Germany  advanced  social  doc- 
trine, much  of  which  has  now  matured  into  political  commonplace, 
included  the  press  in  his  program  of  state  regulation  of  business  activi- 
ties. He  maintained  that  the  press  could  be  debauched  only  by  the 
tendency  to  become  not  a pulpit  of  light  and  learning,  but  a com- 
mercial venture,  deriving  its  principal  revenue  and  even  some  inspira- 
tion from  paid  advertisements,  and  to  preserve  the  freedom  of  the 
press  he  proposed  that  by  law  the  publication  of  advertisements 
should  be  limited  to  a government  gazette.  Recent  events  in  the 
Post  Office  Department  at  Washington  imply  that  this  is  not  impossi- 
ble, even  in  the  United  States.  We  can  then  imagine  the  rural  free 
delivery  carrier  of  the  future  leaving  daily  at  every  vine-clad  cottage 
a pound  of  Congressional  Record  encompassed  and  illustrated  by  five 
pounds  of  advertisement,  while  the  contemporary  muckraking  maga- 
zine will  be  clad  in  the  consciousness  of  the  rectitude  of  its  intentions 
and  will  bear  on  the  modest  cover  of  its  slender  proportions  the 
image  of  a fig  leaf. 

The  day-  of  the  Manchester  school  and  hisses  faire  is  gone.  The 
day  of  the  social  democratic  state  is  dawning.  Personally,  I do  not 
repine  at  the  change,  although  I have  been  educated  in  the  school 
which  thrilled  with  the  achievements  of  unregulated  capital.  I do 
not  mean  to  laud  the  mere  sudden  acquisition  of  great  and  vulgar 
wealth  by  individuals,  but,  regarding  that  as  an  incident  to  the 
national  increment  of  strength  and  power  through  the  development 
of  the  national  domain,  the  period  through  which  we  have  lived  and 
which  is  now  drawing  to  a close  has  witnessed  superb  daring  and  skill 
and  courage  on  the  part  of  our  captains  of  industry.  It  is  they  who 
have  made  our  vast  country  blossom  where  it  was  wilderness.  It 
is  they  who  have  accomplished  for  the  United  States  what  every 
nation  of  the  world  seeks  ardently  as  an  assurance  of  existence— a 
steady  increase  of  population — by  providing  through  their  activities 
the  compelling  allure  for  immigrant  labor.  In  fine,  they  must  be 
chiefly  credited  with  those  industrial  triumphs  which  brought  our 
country  in  the  brief  period  between  the  Civil  War  and  the  Spanish 
War  to  a commercial  position  which  has  challenged  the  political  and 
military  respect  of  the  entire  civilized  world.  Perhaps  we  grew  too 
fast,  but  we  grew  nevertheless,  and  that  growth  was  due  in  no  small 
measure  to  the  methods  of  the  men  who  dared  and  in  daring  did,  as 
most  adventurers  do,  things  which  a subsequent  and  more  intense 
civilization  cannot  approve. 


8 


The  railwa}7s  of  the  United  States  are  part  of  the  achievement 
of  these  men  and  they  have  suffered  a terrific  economic  upheaval  to 
pay  for  their  sins.  Though  the  consequent  struggle  for  the  con- 
tinued existence  of  the  regime  of  private  ownership  and  initiative  is 
not  yet  finished,  I venture  to  believe  that  the  railways  may  still  work 
out  their  salvation,  but  only  if  they  will  bend  their  energies  more 
to  increasing  the  efficiency  of  their  methods — to  intensive  cultivation 
of  their  opportunities — than  to  resistance  of  decrees  which  organized 
society  has  determined  to  enforce  upon  them. 

Facing,  then,  the  inevitable  and  changing  front,  as  the  world  did 
after  the  battle  of  Waterloo,  it  is  the  duty  of  railway  officers  of  every 
rank  today  to  adjust  themselves  to  the  new  conditions  and  accom- 
plish in  their  profession  a new  achievement  of  which  hereafter  the 
American  people  can  be  as  proud  as  they  now  are  of  the  marvel  of 
the  construction  of  the  railways  in  the  generation  which  is  dead. 

It  is  no  time  to  lament  the  past  or  recriminate  the  inevitable.  If 
it  is  a time  of  adversity  it  is  the  more  a time  for  courage  and  cheer- 
fulness, like  that  of  Paul  Jones  on  the  Bonhomme  Richard , when  his 
ship  riddled  and  his  masts  shot  away,  his  flag  at  last  fell  to  the 
bloody  deck.  “Have  you  struck?”  called  the  English  captain,  and  Paul 
Tones  replied  with  a voice  of  thunder:  “Sir,  I have  just  begun  to 

fight !” 

Every  schoolboy  knows  what  was  the  result,  and  every  school- 
boy will  know  what  the  American  railways  can  do  in  similar  plight. 


9 


